This article explores the influence of the pension system on convergence in corporate governance. In a previous paper, I studied the effects of the shift in the private pension system of the US between the 1970s and today, arguing that the gradual transition from defined benefit (DB) to defined contribution (DC) plans turned workers into “forced capitalists.” This changed the incentives of firms and workers as well as the political economy of corporate governance and helped to lead the way toward the shareholder primacy model. I now take the theory to the international level and apply it to the corporate convergence debate. Compared to the US, Continental European and Japanese employees continue to rely to a much larger degree on government pensions that are essentially centralized DB plans. Where company-funded pensions exist, they often are of the DB variety, e.g. in the case of the German and Japanese book reserve plans. Thus, while the development of the stock market is of tremendous importance for members of the aging middle class in US, e.g. their German peers need to rely primarily on the continued ability of the government to fund pensions. Efforts to increase the significance of DC pension plans and private pension savings in Europe during the 1990s and 2000s coincide with the strengthening of the shareholder model. Historically, unfunded pension systems in Europe were introduced during and after World War II for reasons connected to destruction of the previous pension systems funding base, for reasons including inflation, the collapse of capital markets and the need to alleviate poverty. The institutional framework developing at the time was not amenable to the development of a financial system fostering strong capital markets. By contrast, in the US capital markets continued to play a larger role in spite of the experience of the depression.